There are many reasons why the advisers on his seven-person team might not be ready for the burdens of owning the firm, says Charles "Chuck" Osborne, co-founder of Iron Capital Advisors, No. 18 on Financial Planning's list of the country's Top RIAs.

"We've had this conversation with some employees before: 'If I make you owners today, you're partially responsible for this debt we took on,' and, 'Do you understand that when the market goes down that you may not get paid as much?'" says Osborne, who is also a managing director and the chief investment officer at the firm.

ALLAYING CONCERNSGiven that it can take time for prospective owners to reckon with these and other realities, Osborne says that his firm bought "key man" insurance as a stop-gap solution to remain up and running if he were to die anytime soon.

In that case, the policy would pay a sufficient amount to the firm to allow it to buy the firm from his widow or estate, he says.

"It would be enough to purchase my shares from my spouse, who would technically inherit them for all of a day," Osborne says.

The policy is intended to provide peace of mind not only to him and his six colleagues at the firm but also to clients, who can harbor unspoken concerns about any smaller firm's long-term viability.

But even a large insurance payout might not be enough to ensure a firm's continuity if its employees aren't emotionally vested in the firm, whether they own shares or not, Osborne says.

"It's about treating people like you'd want to be treated yourself," he says, adding that all his team members have a voice in the company's direction.

'NOT CATASTROPHIC'In addition, the firm's clients have relationships with numerous team members, which would help if he suddenly wasn't on the other end of the phone, Osborne says.

"Although it would be a big loss, it would not be catastrophic," he says. "I don't believe in our case that there would be significant client losses because, on a day-to-day basis we do everything here as a team."